The UK government has called on the live music sector to introduce a ticket levy system to support the grassroots music community, and to do so “swiftly”, otherwise ministers may use their “convening powers” to kickstart the process.
The levy will help support a grassroots live sector currently in crisis, it’s hoped, rather than any kind of VAT cut on tickets, because that ain’t happening anytime soon. Even though organisations from across the live sector have been calling for a VAT cut ever since the COVID-era rate reduction ended.
In demanding that the live industry put in place a ticket levy system, the government is backing a call made earlier this year by Parliament’s Culture, Media & Sport Select Committee. In a report in May, the committee wrote, “We recommend that the live music industry introduce a voluntary levy on arena and stadium tickets no later than September 2024 to support grassroots music venues, artists and promoters”.
“It is crucial that we work together to support the grassroots including venues, festivals, artists and promoters”, culture minister Chris Bryant said earlier today. “That is why I am urging the industry voluntarily to introduce a ticket levy on the biggest commercial players, to help ensure the health and future success of our entire live music industry for decades to come”.
In a formal response to the select committee’s report, the government says that setting up “a voluntary levy on arena and stadium tickets” would be the “quickest and most effective mechanism for a small portion of revenues from the biggest shows to be invested in a sustainable grassroots sector”. With the September deadline set by MPs already missed, the government says it wants the levy to “come into effect as soon as possible for concerts in 2025”.
By ‘voluntary’, the government means a scheme set up and run by the industry, rather than a legislative levy introduced through a change to the law.
Some supporters of a ticket levy to support grassroots music would prefer a legislative levy similar to that already in place in France. But others have argued that any levy system should be industry-led, and both MPs and ministers say they would prefer that approach, with other options only considered if that doesn’t work.
However, a ‘voluntary’ levy will still likely apply to all shows at arena and stadium venues on a blanket basis, so it won’t be voluntary for the artists and promoters who stage shows in those venues.
Some in the live sector think there should be a levy system set up that artists can then choose to opt into, whereas most artists, venues and promoters operating at the grassroots believe the levy should apply to all shows at large-scale venues.
The government isn’t currently dictating how the industry should set the levy up, but when it says ‘voluntary’ it means non-legislative, not that it would apply on an opt-in basis.
The government’s demand that a ticket levy system be set up as soon as possible has been welcomed by those organisations that represent venues, artists and managers working in the grassroots live sector.
Mark Davyd, CEO of the Music Venue Trust, a long time advocate of the ticket levy scheme, says he “strongly supports” the government’s stance “on the necessity and desirability of a grassroots contribution and believe this response sets out a clear and achievable path for the live music industry to swiftly adopt such a contribution”. He adds, “We look forward to working with both industry and government to make this financial contribution a reality as soon as possible”.
David Martin, CEO of the Featured Artists Coalition, says today's statement from government is “loud and clear”, that the live sector needs to deliver “a blanket ticket levy at large-scale arena and stadium shows” quickly or “it will be mandated upon us”. The FAC, he adds, is “ready to double down our efforts to get this over the line. If UK artists can't afford to tour, the industry will not fulfill its potential”.
Annabella Coldrick, CEO of the Music Managers Forum, says, “Every week I hear from music managers trying to do the impossible and bridge catastrophic shortfalls in their artists’ touring budgets. A ticket levy on all large-scale live music events to support touring artists at this level to get out on the road remains the most practical solution. It is now imperative that we in the industry stand up and deliver it”.
The organisation that will provide the forum for the live sector to come together to set up the levy is LIVE, which has a membership comprised of all the groups that represent the different strands of the live music industry. It has also set up a LIVE Trust that is expected to assist in distributing any funds raised.
Its CEO, Jon Collins, says, “We are glad government has entrusted our sector to play our part in addressing the crisis in grassroots music. Alongside government’s work to deliver an improved trading environment, we are accelerating our work on the development of the LIVE Trust and associated funding to help distribute money to the places it’s needed most”.
The ticket levy wasn’t the only proposal MPs made in their report on grassroots venues. The live sector has long called for a cut on the VAT charged on tickets, meaning more of what fans pay for each ticket can be spent on delivering the show.
The select committee proposed a temporary VAT cut for grassroots venues to help them navigate the current crisis in the sector, alongside analysis of a longer term cut in the VAT charged on live music.
However, ministers are not endorsing that recommendation. “While the government recognises the economic and cultural importance of the grassroots music sector to the UK and keeps tax policy under review”, they say in their formal response to the committee, “we have no plans to introduce a temporary cut to VAT based on venue capacity or to undertake a bespoke economic analysis of the impact of a VAT cut to 10% on tickets”.
The Association Of Independent Festivals has been particularly vocal on the need for a VAT cut on tickets. Therefore, unsurprisingly, it is “disappointed that the government is not exploring different models of VAT, including lower levels of VAT on grassroots music activity - such as a reduction of VAT on festival ticket sales to 5%, which would have saved the more than 60 UK festivals that have fallen in 2024 alone”.
Without the VAT cut, AIF predicts more grassroots venues and independent festivals will close, meaning the total tax contributions from the sector will be lower than if the rate was reduced. AIF’s CEO John Rostron says, “Venues and festivals are closing and will continue to do so. With lower VAT, many would remain open and make a positive contribution to HM Treasury and revenue collection”.